Energy efficiency strategies in multifamily property management

Multifamily properties offer a significant opportunity for substantial energy savings, with the potential to reduce residential energy use by 17% and save $3 billion in utility costs across the US. By implementing energy management strategies, your property can contribute to this national energy goal while enhancing performance and boosting your bottom line.

In this multifamily energy management guide, we explain the benefits of energy efficiency, outline effective energy-saving upgrades, and highlight financing options for these improvements.

What is energy management in multifamily properties?

Multifamily energy management involves monitoring and controlling energy consumption to improve efficiency. It includes tracking usage, identifying waste, and optimizing energy systems. This helps reduce operational costs, protect the environment, and enhance tenant satisfaction in your multifamily property.

How does energy management differ in multifamily vs. single-family properties?

Unsurprisingly, multifamily properties consume more energy than single-family properties. The larger size and higher occupancy rates contribute to this increased energy use.

Managing this consumption is more complex because you are dealing with multiple units, each with varying energy demands. Different tenants will have different energy usage patterns and habits. Coordinating energy-saving measures across all units requires a more strategic and comprehensive approach.

Benefits of effective energy management

Effective energy management offers numerous benefits for multifamily properties. These advantages range from cost savings to improved tenant satisfaction and regulatory compliance.

Reduce operational costs

Effective multifamily energy management leads to significant cost savings. For example, installing a smart thermostat can save approximately 8% of heating and cooling bills per year. These tactical upgrades across your property can boost your profitability over time, allowing you to reinvest in your property to enhance tenant satisfaction or diversify your property portfolio.

Achieve sustainability goals

Reducing your energy consumption lowers your property’s carbon footprint. This enables you to offer green leases, boosting occupancy rates by attracting eco-conscious tenants. Implementing these sustainability management measures also helps your property contribute to global environmental targets, setting you apart from the competition.

Improve tenant comfort

Energy-efficient upgrades can enhance tenant comfort. Improved insulation and efficient HVAC systems maintain consistent indoor temperatures, reducing drafts and hot spots. Smart thermostats and better lighting create a more pleasant living environment, making tenants feel more at home. These tenants are more likely to renew their leases, reducing turnover rates.

Regulatory compliance

Building Energy Performance Standards (BEPS) are regulations that require buildings to meet specific energy or emissions performance targets, aiming to improve energy efficiency and reduce carbon footprints. These standards are enforceable by law and apply to various building types, including multifamily properties. Implementing BEPS helps your property ensure regulatory compliance and avoid potential fines.

What are the most effective energy-saving upgrades for multifamily buildings?

Upgrading multifamily buildings with energy-saving features is key to managing energy consumption. Here are some effective upgrades to enhance your multifamily energy efficiency:

Lighting

Switching to LED lighting is a simple yet effective way to reduce energy use. LEDs consume less energy and have a longer lifespan compared to traditional bulbs. You can also utilize motion-sensor lighting in common areas to increase energy savings.

HVAC

Upgrading HVAC systems to more energy-efficient models can help you save. Once installed, regular maintenance of HVAC units will ensure they continue operating at peak efficiency.

Smart thermostats

Smart thermostats offer precise control over heating and cooling, reducing energy waste. These devices can be programmed to adjust temperatures based on occupancy and time of day. Tenants can also control smart thermostats remotely, enhancing convenience and energy savings.

Appliances

Replacing old appliances with energy-efficient models reduces energy consumption. Energy Star-rated appliances use less electricity and water compared to conventional models. This upgrade can lead to significant savings on utility bills.

Doors and windows

Upgrading to energy-efficient doors and windows can significantly minimize heat loss and gain. These improvements help maintain a consistent indoor temperature, reducing your reliance on HVAC systems.

Weatherstripping and insulation

Adding weatherstripping to doors and windows seals gaps and prevents drafts, enhancing your property’s energy efficiency. Proper insulation keeps heat in during winter and out during summer, further reducing energy use. These upgrades are cost-effective ways to improve comfort and lower energy bills.

How to encourage tenant energy conservation

Upgrading appliances and installing smart thermostats is a great start, but you also need to ensure tenants use these features efficiently. Here are some easy ways to encourage tenants to be more energy-conscious:

Raise awareness around benefits

Tenants who understand the importance and benefits of energy-saving practices are more motivated to reduce their consumption. Keep your tenants informed with regular communication and educational materials about energy efficiency. Highlighting how these practices can lower their utility bills will further encourage their participation.

Incentivize energy conservation

Offering incentives can effectively encourage energy-efficient behaviors among tenants, especially if you cover their utility bills. Consider providing rent rebates as rewards for energy conservation. For example, tenants who reduce their energy consumption by 10% over a six-month period could receive a $50 rent rebate.

Encourage reporting problems

Encourage tenants to report any maintenance issues that affect energy efficiency, like gaps in doors that can cause heat loss or faulty appliances. Provide your tenants with a convenient communication channel for reporting maintenance problems. Once you receive a reported problem, ensure that you address it quickly to reduce energy waste and encourage prompt reporting from tenants.

Financial aspects of energy management

Investing in energy-efficient upgrades can be costly upfront, but the long-term savings and benefits make it worthwhile.

What is the potential ROI for energy efficiency investments?

The potential return on investment (ROI) for energy efficiency investments in multifamily properties can be substantial. There are various factors that influence ROI, including the type of upgrades made, the initial energy consumption of the property, and the local cost of energy​.

To calculate the ROI for your installed energy efficiency upgrades, start by adding up the total cost of the upgrades. Then, compare your energy bills from before and after the upgrades to determine your annual savings. Divide your annual savings How can properties finance energy management upgrades?

Multifamily energy management upgrades can be expensive. For example, installing smart thermostats can cost between $50 and $300 each, plus professional installation fees ranging from $100 to $200. If you own a 50-unit multifamily property, this could add up to a minimum of $7,500 just for this upgrade.

There are various financing options you can utilize to make these enhancements. Here are some choices:

• C-PACE financing: Commercial Property Assessed Clean Energy (C-PACE) is a financing program that can be used by multifamily properties with 5 units or more to make energy-efficient upgrades. This offers long-term financing and lower monthly payments. Make sure to check it is available in your jurisdiction.
• Tax incentives: Various tax incentives are available for energy-efficient upgrades. These can include federal tax credits and deductions for installing energy-efficient systems. Check with your tax advisor to see what incentives you qualify for.
• State and local incentives: Many states and local governments offer incentives for energy efficiency. For example, Oregon provides various programs and incentives for energy-efficient upgrades. Research what programs are available in your area to help offset costs.

Measuring and monitoring energy performance

The best way to measure and monitor energy performance is with energy management software. This software collects real-time data from your building’s systems, analyzes energy usage patterns, and provides detailed reports on key performance indicators. Using this tool helps you identify inefficiencies, optimize energy use, and ensure regulatory compliance.

By using energy management software, you can measure the energy consumption of each unit and common areas. This allows you to see detailed usage reports, such as how much energy each unit consumes monthly. These insights can help you identify areas where energy is being wasted and take corrective action.

The anomaly detection feature can help you monitor tenant energy usage. If a spike in usage is noted, the tenants can be notified with an email. This can help you keep tenants on track with your sustainability goals.

How can data analytics improve energy management strategies?

Data analytics from energy management software can greatly enhance your energy management strategies. With all your energy data centralized in one system, you can easily analyze and interpret it. This helps you identify inefficiencies and effectively plan for energy upgrades, leading to better energy optimization and cost savings.

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